What Is an IRS CP49 Notice?

Q: What if the offset applied to the wrong year?

Dispute the application with the IRS and provide transcripts and documentation to show the correct year. Professional representation can prepare and present this effectively.

Q: My refund was used for a non-IRS debt—do I still get a CP49?

Typically, non-IRS offsets generate a separate Treasury Offset notice. CP49 focuses on offsets to federal tax balances owed to the IRS.

Q: Will future refunds keep getting taken?

Yes. Refunds will continue to be applied to outstanding federal tax until the debt is fully resolved and all required returns remain current.

IRS Notices Explained
Written by Enrolled Agent
Reviewed by Enrolled Agent

A CP49 means the IRS applied your current-year refund to other federal tax you owe. The notice explains how much was offset, the years it was applied to, and what—if anything—remains to be refunded. Here’s what it means and what to do next.

Quick Answer

The IRS used your refund to pay down older federal tax balances. The CP49 lists the amounts applied and which tax years received the credit. If the offset doesn’t clear everything, you may still owe. If it exceeds what you owed, the IRS issues any remainder to you.

Good to know: A CP49 offset to federal tax is different from offsets to other debts (child support, student loans, state taxes) that typically come via the Treasury Offset Program. This notice focuses on federal tax owed to the IRS.

Why You Received a CP49

You had a refund this year and the IRS records show unpaid federal tax from prior periods.
The IRS is required to apply refunds to outstanding federal tax before sending money to you.
Your account may also have penalties and interest that the refund partially or fully covered.

If your refund was applied to non-IRS debts (e.g., state tax, child support), you’ll generally receive a separate offset notice related to those programs.

What the CP49 Means

The notice shows:

Your original refund amount and the offset amount.
Which tax periods received the credit.
Any remaining refund still payable to you or any remaining balance you still owe.

Keep the CP49 with your tax records. You’ll need it to reconcile your current-year return and to verify prior-year balances.

What to Do Next

Use this checklist to stay ahead of the process:

Verify the offset. Pull your IRS account transcripts and confirm the years and amounts credited.
Adjust your expectations. If a portion remains refundable, monitor for payment. If a balance remains due, plan resolution.
Address the root cause. If older balances are recurring, consider a payment plan, penalty relief, or other resolution options.
Stay compliant. File any missing returns—future refunds will continue to be offset until compliance is restored and debts are resolved.

Need the bigger picture? Start with our
IRS Notice Help Center and
Complete Guide to Back Taxes for how offsets fit within collections and your best next steps.

If You Ignore the CP49

If the offset didn’t clear the entire balance, penalties and interest continue on what’s left. Future refunds will likely be applied again until the debt is fully resolved. Unresolved balances can also move deeper into collections (reminders and potential levy notices).

Resolving the remaining balance (or setting a structured plan) prevents repeat offsets and reduces total cost over time.

How Polaris Can Help

Polaris Tax & Accounting reconciles CP49 offsets against IRS transcripts, confirms the application of funds, and builds a plan to resolve what remains—payment plan, hardship hold, settlement consideration, or penalty relief.

We manage the IRS communication for you, keep your filings compliant, and help you avoid repeat offsets going forward.

Your Next Step: If your refund was offset, get a clear path forward.
Schedule a consultation with an Enrolled Agent.

Related Resources

FAQs

Can I stop the IRS from applying my refund?

If you owe federal tax, the IRS applies refunds by law. The practical solution is to resolve or formalize the balance (e.g., payment plan) and stay compliant going forward.

What if the offset applied to the wrong year?

Dispute it with the IRS. Provide transcripts and documentation that show the correct application. We can help prepare that package.

My refund was used for a non-IRS debt—do I still get a CP49?

Typically you’ll receive a separate Treasury Offset notice for non-IRS debts. CP49 focuses on offsets to federal tax balances owed to the IRS.

Will future refunds keep getting taken?

Yes, until the federal tax debt is fully resolved and you remain current on all required filings.